TIOL-DDT 1149 · the untouched capture
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<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#663399" size="3">TIOL-DDT 1149</font><br>
08.07.2009<br>
Wednesday</strong></font></p>
<p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#006600">Government
Expenditure to cross 10 lakh Crores in 2009-10</font></strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> Budgeted Revenue Expenditure for 2009-10 is 8.97 Lakh Crores and the Capital Expenditure is 1.24 Lakh Crores making the total expenditure of the Union at 10.2 Lakh Crores – an all time record. Out of this over 10 Lakh Crores expenditure, the Plan Expenditure is only 3.25 Lakh Crores and the remaining 6.97 Lakh Crores is non-plan expenditure.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Election Commission costs us just Rs 21 Crores while the Supreme Court costs nearly Rs 90 Crores. The Enforcement Directorate will cost us Rs. 51.42 Crores.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Our Interest payment is around Rs. 2.26 Lakh Crores, more than 20% of our expenditure.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Our Pension Bill is around Rs 11,000 Crores.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The CBDT costs the Nation Rs. 3500 Crores, while the CBEC costs Rs 3384 Crores. While the Directorate of Inspection costs 28.62 Crores, the NACEN is a little less expensive at Rs. 21 Crores. The DGCEI costs Rs. 32 Crores. There is a provision in the Budget for Rs. 69.8 Crores for purchase of ready-built Accommodation. Most probably CBEC will surrender most part of this allocation.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The President of India will cost the Nation Rs 27.52 Crores. </font></p>
<p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#006600">Interesting Facts on Income from Income Tax to the Government</font></strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Large business is mainly organised as companies. The Income-tax Department has received 4,10,451 corporate returns electronically up to 31st March, 2009 for the financial year 2007-08 [i.e., assessment year 2008-09].</font></p>
<blockquote>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif" align="justify">The companies reported Rs. 7,11,557 Crore as profits before taxes (losses were reported by about one-third of the companies) but declared a total income (taxable income) of Rs. 4,79,898 Crore only during the financial year 2007-08.</font></p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif" align="justify">These companies paid Rs. 1,58,225 Crore as corporate tax [inclusive of surcharge and education cess] during the same financial year.</font></p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif" align="justify">These companies also paid R<strong>. </strong>6,533 Crore as Fringe Benefit Tax and Rs. 10,670 crore as Dividend Distribution Tax during the year.</font></p>
</blockquote>
<p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#006600">Indirect Taxes Exemption – Revenue Foregone</font></strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The area based exemptions on excise duty cost us Rs. 10327 Crores while the total excise exemption cost is Rs. 1.28 Lakh Crores.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Customs Duty foregone works out to around Rs. 2.206 Lakh Crores.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The total Tax Revenue of the Central Government is estimated at Rs. 6.41 Lakh Crores of which Direct Taxes will contribute Rs. 3.7 Lakh Crores and Indirect taxes about Rs. 2.7 Lakh Crores.</font></p>
<p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#006600">Service Tax on Lawyers – Strike Tomorrow - 'The first thing we do, let's kill all the lawyers</font></strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">It is not easy to tax lawyers- except those taking up Service Tax matters, many of the lawyers believe that lawyers cannot be taxed, especially as they don't provide any service. Lawyers are supposed to be officers of the Court and their main job is to assist the bench in reaching the truth.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Delhi Bar has decided to go on strike tomorrow against the tax on lawyers.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">When Shakespeare said more than 400 years ago - let's kill all the lawyers, it was meant to be as a compliment to the lawyers.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">If you are a Law unto yourselves and try to take the LAW into your own hands, the lawyers are not going to keep quiet. Chidambaram was wise in not taxing the lawyers. Taxing the lawyers is not an easy task as Pranab Babu would realise soon.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Lawyers are supposed to be officers of the Court and as such are not involved in any commercial activity and they feel that they cannot be taxed.</font></p>
<p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#006600">What is all this tamasha with the Budget</font></strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">My good friend acquired through the net, Dr. Gopalakrishnan, a retired IAS Officer feels that all the hype about the Budget is ludicrous – I am afraid of the word ludicrous as I had to tender an apology recently for use of the word in our portal.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Remember DDT had carried many cartoons drawn by Gopal (as he likes to be called)?</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Dr. Gopal says, “Why then are we, as a nation, wasting so much time and energy in watching the budget-presentation and the discussions everywhere following that? This national waste of time has to go. The initiative should come from those who see the budget as a Sacred Bull.”</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">See our <strong><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=9335" target="_blank">Special Column</a> </strong> today for Dr. Gopalakrishnan's Anti Budget analysis.</font></p>
<p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#006600">Jurispruden</font><font color="#FF6633" size="5">tiol</font><font color="#006600">–Thursday's cases</font></strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><strong><strong><strong><strong><strong><strong><b><img src="http://www.taxindiaonline.com/RC2/image/stories/ddt_hammer.jpg" alt="Legal Corner Icon" width="100" height="84" hspace="5" border="0" align="left"></b></strong></strong></strong></strong></strong></strong></strong></font></strong></font></strong></font></strong></font></strong></font></strong></font></strong></font></strong></font></strong></font></strong></font></strong></font></strong></font></strong></font><font color="#663399">Income Tax</font></strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#FF6600">Set off of carry forward loss - 51% of voting power is to be beneficially held during year; Expenditure on Know-how: Section 35AB is applicable when amount paid is not consideration as revenue expenditure but a capital expenditure: ITAT</font></strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>LOOKING</strong> to the definition of the word paid given in sec. 43(2) of the Income-tax Act, ITAT held that the CIT(A) was justified in allowing the deduction. Section 35AB is applicable when the amount paid is not consideration as revenue expenditure but a capital expenditure. It is also useful to note that in case the assessee is not given deduction under sec. 35AB then, it will be entitled to depreciation under sec. 32 of the Act.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#663399">Customs</font></strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#FF6600">Re-import of export goods by SEZ unit by mis -declaring country of origin – Bonafide of appellants relevant to determine quantum of fine and penalty – Redemption fine reduced and penalties set aside: CESTAT by Majority</font></strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE </strong>appellants are manufacturers-exporters of ready made garments having their unit in SEZ. Revenue took up investigation of three containers imported by the appellants and found that the goods imported were in fact originally exported by the appellants earlier. However, in the bills of entry, the country of origin was shown as Dubai. In the course of investigation, it was found by the Revenue that the appellants made certain insertion in the bills of entry indicating the reference of original shipment documents pertaining to earlier exports from the unit, after the Customs noting on the said bills of entry. Action was initiated for confiscation of goods and the Commissioner imposed a redemption fine of Rs. 25 lakhs with penalty of Rs. 10 lakh on the company, Rs. 5 lakhs each on the Director and factory manager and Rs. 2.5 lakhs on the CHA. The Commissioner also ordered that the said exports should not be regarded for computation of NFE.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#663399">See our columns Tomorrow for the judgements</font></strong></font></p>
<p align="justify"><font color="#FF6600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Until Tomorrow with more <strong>DDT</strong></font></p>
<p align="justify"><font color="#FF6600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Have a nice day.</font></p>
<p align="justify"><font color="#FF6600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Mail your comments to</font> <font size="2" face="Verdana, Arial, Helvetica, sans-serif"><a href="mailto:vijaywrite@taxindiaonline.com">vijaywrite@taxindiaonline.com</a></font></p>
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